Timothy Spangler: Saying 'Non' to millionaire supertax

France's Constitutional Council this week overturned President Francois Hollande's controversial 75 percent supertax on people earning over 1 million euro a year (about $1.3 million), dealing a humiliating blow to the increasingly marginalized leader. The tax hike was a key element of Hollande's winning platform last year against Nicolas Sarkozy.

Critics have blamed the supertax for a spike in the number of wealthy French citizens moving abroad. Even cinematic icon Gérard Depardieu recently announced plans to move next door, to Belgium. In an article published in response to accusations by the French Prime Minister Jean-Marc Ayrault that he was behaving in a "shabby" manner, Depardieu defended his actions in the strongest terms. "I'm leaving because you consider success, creation, talent, in fact being different, must be punished." Even Russian President Vladimir Putin has weighed in, kindly offering Depardieu a Russian passport, should he need one.

Although estimates were that the tax would apply only to approximately 1,500 individuals, the proposal had great symbolic importance for Hollande and many of his leftist supporters with the Socialist Party, who stress the need for the rich to demonstrate adequate levels of "economic patriotism" during the lingering financial crisis.

The French court struck down the law as unconstitutional on the grounds that two families with the same aggregate income could be charged significantly different tax rates, an outcome that offends the deep-seated French belief in equality. Hollande's government quickly announced plans to include an amended version of the tax, which will withstand constitutional scrutiny, in the next budget.

Hollande has never hidden his strong dislike for the rich. With official estimates that the tax would only raise 500 million euro next year, less than 0.3 percent of income tax collections, the proposal can be seen as more of a statement of political confrontation than a meaningful contribution to the uphill battle to balance the French budget.

The overturning of the tax is an embarrassment to the governing Socialist Party, and Hollande was branded by many critics across the political spectrum as a political amateur, prone to ineffectiveness and incompetence. By mistakenly drafting the tax law to target individuals instead of households, which are the basis for the rest of the French tax code, Hollande's government displayed an embarrassing lack of basic knowledge about the country's own laws.

Regardless of the procedural setback, Hollande took to the airwaves on New Year's Eve to defend his stewardship of the country and to reiterate his belief that "those who have the most will always be asked for more." Unfortunately, as Hollande continues to battle for his pet tax policy, unemployment in France continues to rise, now for a 19th consecutive month. It is unclear how persistent hostility toward wealth creation will translate into more jobs and more economic growth. He stresses the need to win the great battle for employment, although it is not clear how Hollande intends to create the jobs that so many desperately need.

Interestingly, many French are already reminiscing fondly about Sarkozy's time in office, with the frenetic former president polling twice as high as the Elysee Palace's current occupant in recent approval ratings. The French electorate eventually tired of Sarkozy and his manic approach to presidential duties, and turned to Hollande in pursuit of a more normal and traditional head of state. Unfortunately, many now feel that the mediocre Hollande has been unable to deliver the leadership and vision necessary to help France overcome its economic challenges. Depardieu has stated that his desire to move to Belgium is unaffected by the temporary setback on the supertax.

Clearly, Hollande has higher hopes for 2013, given the difficulties he has faced in 2012 to get his presidency up and running. Perhaps he will modify his highly symbolic 75 percent tax proposal and instead propose comprehensive and substantial changes to the French tax system that will actually raise more in much needed revenue, instead of scoring simplistic partisan points.

The supertax remains broadly popular in France, with approximately 60 percent of citizens surveyed approving of the proposal, far higher than Hollande's approval rating. However, France needs effective policies far, far more than it needs popular policies.

The lesson that is, ultimately, learned again and again from punitive tax rates adopted as a result of base political calculations in order to "soak the rich" is that they lower, rather than raise, the amount of money actually collected. Unfortunately, this lesson is soon forgotten by those on the left keen to rally the discontented and envious fringes of their supporters.

If taxation is a priority for Hollande, then the entire French tax code is in serious need of reform. Entrepreneurs need encouragement and support. Job creators should be rewarded, not punished. Tough questions must be asked about the competitiveness of French companies and the productivity of French workers.

France faces considerable challenges in 2013. Hollande must be willing to take those steps necessary to change the direction his country is headed. Simply clinging to populist campaign rhetoric is not enough. Real leadership is required.

Attorney and writer Timothy Spangler divides his time between Orange County and the United Kingdom.